How to Build a Growth Plan(Expansion vs Expertise)

Gabe Jarnot, Northland CapitalChris Enbom, Allegiant Partners

Jennifer Finken, NCMIC

Introductions

Today’s Goal

• Identify methods & tools that you can use to help your business grow

1. Broader

2. Deeper

3. Smarter

For Starters

– How we define Expansion vs Expertise– Maybe not a “versus” perspective, but more . . . How, when, who, where perspective

Before you Grow, You Need to Know

What is your business model?Are you clear on what your model REALLY is?–At a basic level, direct vs vendor

In Thousands

2014 Small Ticket

Portion of SEFA - ELFA

Banks Captives Independents Total

Vendor Programs $6,508,201 $35,781 $2,027,736 $8,571,718

Captive Programs $0 $14,213,742 $0 $14,213,742

Captive and Vendor Programs $6,508,201 $14,249,523 $2,027,736 $22,785,460

Originated Directly $755,874 $17,178 $683,911 $1,456,963

Total Originated $7,264,075 $14,266,701 $2,711,647 $24,242,423

30% 59% 11%

Less than 10% direct

Basic Market/SWOT Analysis

Before looking at any growth plan, we need basic SWOT (Strengths, Weaknesses, Opportunities, Threats) Analysis/Market Data

• What sort of market penetration do you have?

• Why do your customers use your services?• How do your rates and levels of service

compare to competition?• Strengths, Weaknesses, Basic Market Data

Bad Credit

Great Credit

Big Vendor, Lots of Financing Options

Complicated StoryUsed Asset

Small Vendor, No Financing

Good Credit

Great Asset

Private Party Sale

Unpopular Asset/Industry

Spectrum of Customer Stories

High Rate

Low Rate

Big Volume Capacity

Sell on Speed

Willing to Spend Time on Credits

Ability to Take High Risk

Deep Understanding of Industry and Customer Profiles

Very Efficient

Collections Capability

Unpopular Asset/Industry

Spectrum of Funding Sources

Vendor

Direct

Willing to Pay for Other Bundled Services

Working with Limited Resources

1. Whether larger or smaller companies, we are all constrained by resources

2. Understanding how to analyze growth within an existing niche versus starting an initiative in a new niche or area is difficult and complex

“How and Where do I look to grow?”

Resources to Consider

Acquire New ClientsAcquire New Clients

Base RetentionBase Retention

Market PositioningMarket Positioning

Adjacent MarketsAdjacent Markets

Grow Share of WalletGrow Share of Wallet

Growth InitiativesEX

PAN

SIO

NEX

PERT

ISE

RevenueCurrent Year Goal 1-3 Years

Closing Ratio

Examples - CL ConversionVendor Market Share Increase Average Ticket

Examples - New HiresNew Accounts/Sources

Examples - Identified New Opportunities

Examples - JV Partnerships and/orAcquisitions

Two Important Points

1. Each source of revenue requires a focus on customer value and go-to-market

capabilities

2. Each source of revenue requires different skills and priorities

Which option(s) do you select?Option(Give it a Name)

Risk is Low (Yes or No)

MissionSynergy (HML)

Level of Ease(HML)

Market Advantage (HML)

1. Closing Ratio

2. CL Conversion

3. Vendor Share

4. Average Ticket

5. New Hires

6. New Accts/Sources

7. New Opportunity

8. New Opportunity

9. Partnerships/JV’s

10. Acquisitions

Choose your Growth Strategy & Describe your Vision in each Window

2017

2016

2015

Finalize

• Priorities for next year• Define Tactical Action Steps• Determine the one step that needs action

now.

What you do in the next 90 days following this exercise will determine where you will be three years from now

Developing a Growth Plan?

• Know Who you Are• Know your value proposition & go-to-market

capabilities• Develop a series of Growth Initiatives• Filter and Prioritize• Define your Vision/Strategy next 3 Years• Set Goals & Tactics

Questions?